Donald J. Trump and the Deep State, Part 2

•Peter Dale Scott, is a former Canadian diplomat, Professor of English at the University of California, Berkeley, co-founder of the Peace and Conflict Studies program at Berkeley, poet, and 2002 recipient of the Lannan Poetry Award.

• The following is Part 2 of a two-part series, excerpted from The American Deep State: Big Money, Big Oil, and the Struggle for U.S. Democracy, Updated Edition (copyright 2017) (paperback); by Peter Dale Scott with permission of the publisher, Rowman & Littlefield. All rights reserved.

Trump and the International Deep State

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The first charge against Trump was the CIA-backed claim that Russian intelligence agencies hacked organizations affiliated both with Hillary Clinton and with the Democratic Party, and that the hacks were apparently “designed to benefit Donald Trump’s presidential aspirations in one fashion or another.”[52] (Politico also reported that “Ukrainian government officials tried to help Hillary Clinton and undermine Trump by publicly questioning his fitness for office.”)[53]

A second charge against Trump, closely related, was that

as major banks in America stopped lending him money following his many bankruptcies, the Trump organization was forced to seek financing from non-traditional institutions. Several had direct ties to Russian financial interests in ways that have raised eyebrows. What’s more, several of Trump’s senior advisors have business ties to Russia or its satellite politicians.[54]

In May 2016 the Washington Post and Buzzfeed charged specifically that

Trump’s top adviser, Paul Manafort, has spent much of his recent career working for pro-Russian forces in Ukraine, and doing complex deals for an oligarch with close ties to Putin.… Manafort … has, according to court documents, managed tens of millions of dollars for Oleg Deripaska, an oligarch denied entry to the U.S. reportedly for ties to organized crime, but so close to Vladimir Putin that top Russian officials fought (unsuccessfully) to get him a visa.[55]

On the eve of the new Trump presidency The New York Times reported that

American law enforcement and intelligence agencies are examining intercepted communications and financial transactions as part of a broad investigation into possible links between Russian officials and associates of President-elect Donald J. Trump, including his former campaign chairman Paul Manafort… and Roger Stone.[56]

In January 2017 Buzzfeed leaked the source of these charges: a private intelligence report transmitted by the CIA to Trump.[57] This report, by former British intelligence Christopher Steele, did not as released mention Deripaska at all, but contained instead an unexplained discussion of Deripaska’s bankers, the Alfa Group, along with its founders Mikhail Fridman and Pyotr Aven.

Just before the election The New York Times reported that

For much of the summer, the F.B.I. … scrutinized advisers close to Donald J. Trump, looked for financial connections with Russian financial figures, … and even chased a lead — which they ultimately came to doubt — about a possible secret channel of email communication from the Trump Organization to a Russian bank….

F.B.I. officials spent weeks examining computer data showing an odd stream of activity to a Trump Organization server and Alfa Bank. … But the F.B.I. ultimately concluded that there could be an innocuous explanation, like a marketing email or spam, for the computer contacts.[58]

The next day the Jewish paper Forward raised a question, not yet answered, about Alfa Bank’s principal owner, the philanthropist oligarch Mikhail Fridman, listed as #73 on the Forbes list of the world’s billionaires in 2016 (once #20), and the second wealthiest Russian:

Is a Russian Jewish oligarch with Israeli citizenship and close ties to both Vladimir Putin and Benjamin Netanyahu running a secret cyber-communications channel between Donald Trump’s presidential campaign and Russian authorities? [59]

The various speculations about the Trump link to Alfa and Fridman, whether innocuous or shady, justify a closer look at the charges about Alfa’s influence two decades ago, when Alfa’s dubious clout in Washington included protection from both senior Democrats like Richard Burt of Kissinger McLarty Associates and also senior Republicans like Dick Cheney.[60] As The Guardian reported in 2002, Alfa’s 1990s clout in Washington was demonstrated when its oil company, Tyumen,

was loaned $489m in credits by the US Export-Import Bank after lobbying by Halliburton…. The [Clinton] White House and State Department tried to veto the Russian deal. But after intense lobbying by Halliburton the objections were overruled on Capitol Hill [which then was Republican controlled]…. The State Department’s concerns were based on the fact that Tyumen was controlled by a holding conglomerate, the Alfa Group, that had been investigated in Russia for mafia connections.[61]

Under the guidance of Richard Cheney, a get-the-government-out-of-my-face conservative, Halliburton Company over the past five years has emerged as a corporate welfare hog, benefiting from at least $3.8 billion in federal contracts and taxpayer-insured loans.

One of these loans was approved in April by the U.S. Export-Import Bank. It guaranteed $489 million in credits to a Russian oil company [Tyumen, owned by Alfa] whose roots are imbedded in a legacy of KGB and Communist Party corruption, as well as drug trafficking and organized crime funds, according to Russian and U.S. sources and documents.

[Two reports, one by “a former U.S. intelligence officer,” and one by the Russian FSB] claim that Alfa Bank, one of Russia’s largest and most profitable, as well as Alfa Eko, a trading company, had been deeply involved in the early 1990s in laundering of Russian and Colombian drug money and in trafficking drugs from the Far East to Europe….

The FSB report, too, claimed that the Alfa Group’s top executives, oligarchs Mikhail Fridman and Pyotr Aven, “allegedly participated in the transit of drugs from Southeast Asia through Russia and into Europe.”[62]

This impression is reinforced by the statements and actions of Michael Flynn, Trump’s new national security advisor. Flynn has made several appearances on Russia’s RT network, where he has often argued “that the US and Russia should be working more closely together on issues like fighting ISIL and ending Syria’s civil war.” In June 2016 Flynn attended an RT gala dinner in Moscow, seated just two seats away from Putin. [63] And in December Flynn reportedly met with far-right Austrian political party leader Heinz-Christian Strache, whose Freedom Party had recently signed a cooperation deal with Putin’s United Russia Party. [64]

President Vladimir Putin, Igor Sechin, Chairman of the Board of Rosneft (left) and Rex Tillerson, Chairman of ExxonMobil signed an agreement on joint development of petroleum reserves in Western Siberia, June 2012. Photo credit: President of Russia / Wikimedia (CC BY 3.0)

An even closer friend of Putin in Trump’s team, ironically, is former Exxon CEO Rex Tillerson, his Secretary of State.[65] In fact Tillerson, through Exxon’s development of Russian oilfields, “has deep ties to Russia, dating back to the Boris Yeltsin administration.”[66] As Julian Borger told the Guardian,

Putin… bestowed the Order of Friendship on Tillerson in 2013. The Wall Street Journal reported: “Friends and associates said few US citizens are closer to Mr. Putin than Mr. Tillerson.”[67] The 64-year-old Texas oilman spent much of his career working on Russian deals, including a 2011 agreement giving Exxon Mobil access to the huge resources under the Russian Arctic in return for giving the giant state-owned Russian oil company, OAO Rosneft, the opportunity to invest in Exxon Mobil’s operations overseas. ….The 2011 Exxon-Rosneft agreement was frozen when sanctions were imposed on Russia in 2014, following the annexation of Crimea and covert military intervention in eastern Ukraine. Exxon Mobil estimated the sanctions cost it $1bn and Tillerson has argued strenuously for the measures to be lifted.[68]

Trump’s criticisms of Obama’s sanctions on Russia were one powerful reason for Exxon to prefer Trump in the 2016 election.[70] But Trump was also attractive for his promises of deregulation:

President Trump will “absolutely” be a boon to Exxon and the rest of the oil industry, Fadel Gheit, an analyst at Oppenheimer & Co., said in a telephone interview. “The industry hasn’t asked for a hand up from Washington, but instead has said, ‘Get off our backs.’ Less regulation means less burden” on oil explorers.[71]

And Trump clearly will continue Exxon’s longtime history of opposition to measures to control global warming.[72] (When still CEO, Tillerson ended Exxon’s two decades of strenuous climate change denial, and came out for a carbon tax. But skeptics, including The New York Times, suspected this was merely a skillful means of defeating the more viable “cap-and-trade” carbon proposals that were then being debated in Congress, and ultimately defeated.)[73]

My book The American Deep State documents the leading role played by Exxon behind the elections of the oil-friendly presidents Eisenhower in 1952, and Reagan in 1980 (below, pp. 18-20, 27-28). It is not surprising that Exxon in 2016 should have helped propel yet another former television performer into the White House.

The “Party of Davos” and the “New New International Order”

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In short, the Trump team connections to the Russian state and deep state — both overt (through Exxon) and covert (through Manafort and Alfa) would appear to link Trump to a shady larger network or networks connected also to the same Washington swamp he promised to drain. Such networks led me in the Preface to the French edition of this book to talk of

a supranational milieu of the super-rich, just eighty of whom are now said to own nearly as much as the 3.5 billion people who occupy the bottom half of the world’s income scale.[74] Thanks to the enormous increase in global wealth in recent years, the “global power elite” who meet annually at Davos now have far more influence on how the world will be governed than those who meet annually at the United Nations General Assembly.

Those at Davos do not need to give instructions to the American deep state, which is already structured around responsiveness to the requirements of extreme wealth in Wall Street and elsewhere. And some of them are members of what have been called “shadow elites, those whose influence stems from illicit or unconventional means.”[75]

Naomi Klein, ascribing Trump’s victory to the neoliberalism of the Democrats and of Davos, has written of

the rise of the Davos class, a hyper-connected network of banking and tech billionaires, elected leaders who are awfully cosy with those interests (neoliberal policies), and Hollywood celebrities who make the whole thing seem unbearably glamorous.[76]

And before becoming the Chief Strategist and Senior Counselor in the Trump White House, Steve Bannon, while executive chair of Breitbart News, had said in a speech at the Vatican that working men and women in the world were “tired of being dictated to by what we call the party of Davos.”[77]

Trump has just chosen an ambassador to the European Union, Ted Malloch, a professor “well-known for his pro-Brexit and anti-EU views,” positions consistent “with Trump’s longstanding anti-EU and anti-NATO biases.” Reporting this, Salon notes also that “some American foreign policy watchers are concerned that he is also motivated by his close ties to Russian dictator Vladimir Putin.”[78]

The Trump attack on the “party of Davos,” the status quo of the world superclass, is likely to continue.[79] On January 26, Trump announced “he would strike numerous bilateral trade deals, as opposed to multilateral accords like the Trans-Pacific Partnership.”[80]

This approach, which by itself could please China as well as Russia, seems to reflect a coherent effort to replace the old consensus of the “party of Davos”, with what the right-wing Drudge Report approvingly called the “new, new world order”.[81]

The “New, New World Order” may be said to represent the mavericks of the international deep state, eager to dispense with the regulations of the old insiders. But they are still part of the nexus of uncontrolled big money, even if drawn more from the under-reported shady underside of that superclass.

As I write after just one week of Trump in office, it already seems clear that we can expect a “Trump revolution,” one that will almost certainly attempt to reflect and repeat the major features (deregulation, anti-abortion measures, a defense spending buildup, tax cuts for the rich, and deficit financing) of the Reagan revolution before it. And it should not be too surprising if the Trump revolution, just like the Reagan revolution before it, turns out to have been not just financed, but partly plotted, at the levels of the American and the international deep state.[82]

Personal Postscript

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As I write this new Introduction in January 2017, the involuntary response to Trump’s election from many of my friends in both political parties has been anger, hatred, or despair. Many, like Michael Kinsley in the Washington Post, have charged that “Donald Trump is a fascist.”[83] From such alienation, millions of people protested worldwide, the day after Trump’s inauguration, in what was perhaps the world’s first global political action. This was a welcome step towards shaping a global active public opinion.

It is true that Trump, like Hitler, campaigned against big bankers while quietly taking money from them. But the infant Weimar Republic Hitler overthrew, jerry-built amid the ruins of post-war Germany, cannot be compared to the constitution and civil polity of America, among the oldest and hardiest in the world.

I say below (p.99) that America is also exceptional

for its percentage of citizens who are incarcerated, for its disparity in wealth and income between rich and poor (a ratio exceeded among large nations only by China), and for its indiscriminate use of lethal power abroad.

From the beginning, America has been embroiled in major divisions, arising chiefly from its amazing diversity. But it is also the leader among world powers in its ability to process and transcend, however imperfectly, these divisions.

As so many times before in US history, we are entering another period of divisions and protests. But a successful protest of the nonviolent kind I hope for in this book (see below, pp. 164, 181-90) must be one inspired by deeply critical love of this flawed country, not by hatred.

Grateful for this. Surprised there are not more comments. Is everyone hiding out of security concerns, lol. Don’t know if it’s appropriate to post links here, but Peter Dale Scott’s article does make a nice complement to a recent 40-page analysis by author Nafeez Ahmed.

I am also surprised at the apparent paucity of interest – hopefully more people read than take the time and effort to comment. I’m not too sure I’m joining in the laughter over hiding out over security concerns – not in this post-1984 hall of mirrors presided over by Agent Orange.

Many comments are located on the first part. Peter Scott Dale or Peter Dale Scott doesn’t have much of a bio to back his qualifications for this article. Just being a professor means nothing these days…. particularly if your a professor at Berkeley. That’s something I wouldn’t publicize because Berkeley doesn’t turn out many if any note-worthy graduates, which says alot about their educational system, doesn’t it?
…. Oh, but they sure do know how to produce protesters, some of which are staff members; not something you’d want to put on a resume’ though. I wouldn’t think.